Out of the woods?
...or are we about to witness a real dip in tyre markets? While the massive drops in OE demand of a few years ago appear to have turned a corner, and while tyre manufacturers the world over are steadily ramping up production to pre-recession levels, some are questioning whether or not replacement markets have really felt the full force of the recession. Could 2011 be shaping up to be worse than 2008/2009?
Continue ReadingSo long and thanks for all the tyre sales
After an eight-year long mutually beneficial relationship Maxxis International UK Ltd has decided to part company with its long-term distribution partner Grouptyre. The news came in the form of an announcement that the two companies have ended their exclusivity agreement, which implies that the firm will continue supplying Maxxis tyres for the time being. However, Tyres & Accessories understands that there is more to the story than that.
Continue ReadingOut of touch with [super] highway reality?
No I am not referring to the IT skills of the tyre business at large. To be fair, in recent years our industry has taken giant steps towards the optimization of its processes using computers and better use of the Internet to reach customers. Just look at the continuing proliferation of tyre information and retails sources online, not to mention the trade’s increasing presence on social networking sites and latterly the emergence of a number tyre price comparison sites. The, of course, there’s EDIWheel but that’s all another article (see October’s e-commerce feature for more on this). No, on this occasion I am talking about the UK government policy, metrocentricity and online tyre browsing – or rather the lack of it in Westminster.
Continue ReadingTaking the initiative
Recent months have seen a flurry of activity in the road safety and legislative lobbying arenas. During March and April this culminated in the surreal combination of blimping, debating, campaigning and contesting – all focusing in on improving road safety in general and tyre and wheel integrity in particular.
Continue ReadingMarch Editorial: Driving distribution forward
The last time Tyres & Accessories reported at length on EDIWheel the coverage provoked a welcome reaction. The healthy debate on the implementation of EDIWheel followed our publication of a report on the subject just over a year ago (January 2010), which featured a TIF hosted summit on the protocol. More than a year after the event, and after systems suppliers such as Tyreman made recent efforts to promote their EDIWheel compatible wares, Tyres & Accessories thought it was time for an update.
Continue ReadingTyre Shortage? Fujian Province Exported Over 32.85 million Tyres in 2010
While wholesalers importing Chinese tyre products into mature European markets such as the UK struggle to negotiate supply issues and brace themselves for another round of price increases, there are reports that tyre makers in one part of the People’s Republic are over-producing to the extent that they are actually stockpiling tyres. Southeast China's Fujian province exported 32.85 million between January and November 2010, signalling a 27.6 per cent year-on-year increase in shipments, according to a report from the province's customs officials. The total value of the tyres sold is said to have amounted to US$460 million, a jump in value of 34.8 per cent over the corresponding period of 2009. The export price averaged $13.9 per unit, up 5.7 per cent from 2009.
Continue ReadingTrading Places: How Tyre-Makers are Positioning Themselves in the World Economy
As Tyres & Accessories' November issue went to press President Barrack Obama and David Cameron were out banging the drum for American and British business in India and China respectively. 24 hours after Obama set foot in the subcontinent, the Sunday Telegraph's resident cartoonist was portraying the leaders of two of the richest countries in the western world as beggers seeking scraps from two so-called “emerging markets.”
Continue ReadingTaking the Plunge: The Good Tyre Guide and bridging the online retail/wholesale gap
The launch of Grouptyre’s goodtyreguide.com proves that the era of apps, widgets and plugins is upon us (see October's magazine for more on this). And while this column doesn’t normally single out individual companies for attention, the fact that we are running both e-Commerce and Wholesale features this month makes this story too apt to miss. When Grouptyre announced it was seeking to bridge the wholesale/retail divide with a solution that not only ensures it has an online footprint, but also seeks to make the enterprise profitable for everyone involved, it certainly caught the market’s attention (see September’s magazine for details of the launch). That’s not to say that Grouptyre is unique amongst wholesalers in considering an online channel/B2B plugin approach. Far from it. Tyres & Accessories has it on good authority that all of the top three have looked into operating comparable systems. The difference is that Grouptyre is the first one to seize the initiative and take the plunge.
Continue ReadingHas the DfT Got an MOT Screw Loose?
MOT tests need tightening up not dumbing down, if the views of respondents to Tyres & Accessories’ August poll are anything to go by. Last month visitors to T&A’s tyrepress.com website were asked if tyre age should be inspected as part of MOT tests. A whopping 89 per cent of respondents said yes. We asked the question following last month’s editorial on tyre age, which was triggered by the news that Gloucestershire coroner Alan Crickmore wrote to the DfT recommending more attention be paid to tyre age during MOTs (see Tyres & Accessories August 2010, page 3) and in light of the government’s suggestions that MOT intervals should be increased to two years rather than the current annual requirement. However, our poll results would seem to suggest there isn’t much support for either government moves to spread out the time between MOT tests or its reticence to include tyre age in the MOT requirements.
Continue ReadingShould VOSA Call Time on Old Tyres?
The news that Alan Crickmore, a Gloucestershire coroner has written to the Secretary of State for Transport (Rt Hon Philip Hammond MP) calling for a ban on vehicle tyres that are more than 10 years old lends new support to a cause that has been a topic of discussion within the industry for some time. The case Crickmore referred to was the death of Nazma Shaheen, whose Toyota Lucida was travelling northbound along the M5 when a tyre burst and the car clipped a kerb and rolled over, throwing Mrs Shaheen clear of the vehicle on 6 May 2009. Tyre age was said to have precipitated the accident. What stood out for me the first time I read about this case, apart from the tragic circumstances that initially caused the coroner’s involvement, was the fact that this was the first time that a completely non tyre-related party has publically called for an overhaul of the tyre aging rules.
Continue ReadingAnti-Dumping Pressure Mounts on Chinese Tyre Makers
While most of the rainbow nation was preparing to welcome people from far and wide to the first World Cup on African turf, the country’s legal eagles were deliberating over whether or not to kick certain Chinese tyres out of the country with an anti-dumping investigation. On 4 June 2010 the South African press reported that the High Court of Pretoria’s Judge Willie Hartzenberg set aside an earlier ruling made in 2007 by the Trade and Industry Ministry (Itac), to terminate anti-dumping probes against Chinese tyre exporters. He further ordered that (Itac) complete an anti-dumping investigation within four months. The judgement was duly lauded as bringing "fair competition" to the tyre manufacturing industry by those who brought the case, namely Bridgestone South Africa, Continental Tyre South Africa, Dunlop Tyres International and Goodyear Tyre & Rubber Holdings through their representative body South African Tyre Manufacturers Conference. Whether or not the Chinese tyre imports in question can accurately be described as dumping – and it would be prudent to let the courts decide that – the ruling is another sign that products manufactured in the People’s Republic are not the quick and easy sell they once were. As far as tyres are concerned, the combination of increasing natural rubber, oil and steel input prices, combined with an unstable shipping cost context and added to the increasingly inhospitable international trade climate mean the latest decision in South Africa may force some Chinese factories to rethink either the delivery strategy or destinations of their tyres.
Continue ReadingCurve Ball – Is Football a Better Sponsorship Investment Than Motorsport?
While Michelin, Pirelli, Cooper, Kumho and – apparently – two other firms were battling it out to win the 2011 Formula 1 tyre supply deal, Continental AG was busy adding another championship to its football sponsorship portfolio. Conti’s decision to become a ‘premium’ sponsor of the DFB (German Football Association) Cup in its home market in addition to the firm’s global sponsorship of this year’s World Cup and the 2014 event in Brazil, demonstrates some typically Teutonic pragmatism. Rather than get involved in a bidding war that presents the winner with a logistic nightmare and a huge multi-million pound/euro/dollar bill, their thinking is that investing in a variety of top level football sponsorship deals reaches just as many potential customers. And this is without the associated hassle of having to develop, custom build, test and deliver some of the most expensive tyres in the world. True there is all the associated automotive excitement that comes with F1 support, but this way there’s no chance of your tyres making an equally public spectacle of themselves either, leaving the marketing department (and the R&D department) free to concentrate on other things.
Continue ReadingE-Tailers and Autocentres are on the Up
What will the tyre retail business look like in five years time? Who knows. As I have learnt to my peril in this column, prognostication is a dangerous business. Let’s not recall how last year I wrote “unless there is an unlikely stay of execution” regarding the implementation of s-marking regulations (see T&A’s August 2009 issue for more on this). But I digress. The news at the end of February that Halfords bought Nationwide Autocentres for £73.2 million (see page 14 for complete coverage) says something about how tyre retail is evolving. Along with the purchase announcement came plans to rebrand the chain and the affirmation of existing plans to double the number of branches to 424. When you consider that the second largest tyre retail chain in the country, ATS Euromaster, reported that it was “reviewing” up to 80 of its 456 branches last September, it is clear that size gap between chains at the top of the two sectors is narrowing. True, Autocentres don’t focus on tyre sales like the traditional outlets do, but there are signs they are considering how to increase their focus in this area.
Continue ReadingBigger is Dumber
In a recent speech given to the Professional Contractors Group (PCG), legendary tyre retail mogul Sir Tom Farmer warned would-be entrepreneurs against having simplistic, size orientated goals for their businesses. The Kwik-Fit Founder may have sold a 700-branch strong tyre retail chain to Ford for £1 billion in 2001, but for him size isn’t everything. He might not be Warren Buffet yet, but Scotland’s own oracle of Edinburgh had this sage advice: “bigger is dumber.” PCG is apparently the biggest organisation representing freelancers in Europe, so it sounds like Sir Tom was preaching to the choir with his message of the importance of building businesses on a core group of key employees, and then outsourcing the rest. However, as virtually all the global tyre manufacturers are now demonstrating in their collective quest to make an increasing amount of high-performance tyres in low-cost countries with less human intervention, full-time employees are expensive and an inevitably long-term investment. And, as most national tyre retail chains will concede, running large networks such as theirs is a similarly complicated business.
Continue ReadingEU-Korea Free Trade Agreement Will Aid Tyre Sales
On 15 October EU Trade Commissioner Catherine Ashton and Korean Trade Minister Kim Jong-hoon initialled a free trade agreement (FTA), which the EU calls “the most important ever negotiated between the European Union and a third country.” Estimated to be worth a total of 19 billion euros in new trade for EU exporters, the agreement is designed to remove virtually all tariffs between the two economies. However, it is a bilateral deal. And European carmakers, apparently fearful of being swamped by imports of more economically priced Korean cars in an already depressed market, were the first to call for a rethink through industry body ACEA. However this appears to have been too little too late and according to the commission, the initialling signals the end of negotiations. The current “stable legal text” will be formally presented to EU Member States in early 2010. So what does this mean for the European tyre (and associated product) markets?
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